Gibson Brands Inc, the iconic guitar manufacturers, has truly pulled at our heartstrings as they have recently unveiled that they have filed for Chapter 11 bankruptcy.
Since their shocking revelation on Tuesday, they have announced that they are developing a plan to reorganize its musical instrument business under the new ownership of its lenders. Melody Capital Partners LP, Silver Point Capital, and funds affiliated with KKR Credit Advisors will work together to exchange debt for equity ownership in the fresh take on the company.
In a filing in U.S. Bankruptcy Court in Delaware, a Gibson spokesperson has stated that the overseas consumer electronics market will be wound down, allowing it to refocus on its audio, i.e. Cerwin Vega, KRK, and Stanton headphones, speakers and turntables, and guitar-making businesses. The result will directly touch the lives of professional and amateur musicians and sound engineers.
“This process will be virtually invisible to customers, all of whom can continue to rely on Gibson to provide unparalleled products and customer service,” Chief Executive Henry Juszkiewicz stated in a press release.
Founded in 1894, the truly groundbreaking brand, with factories in Memphis, Nashville, and Bozeman, has sold more than 17,000 guitars annually in 80+ countries. Juszkiewicz acquired Gibson in 1986; since then, sales of its electric guitars grew 10.5 percent to $122 million in the 12 months through January from a year earlier.
In 2014, when the company purchased the consumer electronics arm from Philips, the truly unfortunate and unforeseen circumstances started to arise. The business started to wind down, which included formal liquidation proceedings in Hong Kong, six European countries, and the United Kingdom. According to court papers, this all occurred on April 30, 2018.
It has been reported that Gibson has secured $135 million in debtor-in-possession financing in order to fund its operations during the Chapter 11 proceedings. Keeping its dreams in mind, it plans to exit bankruptcy on Sept. 24. We absolutely can’t wait to see this wish come true.